Report looks into the affect of former farmland ownership rules

The issue of farmland ownership in Saskatchewan stirred up controversy only a few years ago as foreign and institutional investors bought up land — a research paper published this week showed how land prices were affected.

Andre Magnan, associate professor Sociology & Social Studies University of Regina, co-authored a report Who is Buying the Farm?. The report looks into farmland investment patterns in Saskatchewan from 2003 to 2014. TROY FLEECE / Regina Leader-Post

The issue of farmland ownership in Saskatchewan stirred up controversy only a few years ago as foreign and institutional investors bought up land. A research paper published this week says outside investment is one of the factors in rising land costs.

“I think what’s interesting is that in specific places where investors buy up a lot of land locally that can definitely have an impact on the local farmland market,” said André Magnan, an associate professor in the department of sociology and social studies at the University of Regina and co-author of the report.

The report called Who is Buying the Farm? was written by Magnan and Annette Aurélie Desmarais, an associate professor from the University of Manitoba and published by the Canadian Centre for Policy Alternatives.

Magnan and Desmarais sorted through land titles data for agricultural land in the province from 2003 to 2014 — 2003 being the year farmland ownership rules were changed to allow non-Saskatchewan residents to buy land and 2014 being the year the Canada Pension Plan bought $128 million in farmland holdings. Last year the government tightened farmland ownership rules to ban pension plans and large trusts from buying land.

The province realizes how expensive farmland has become and has done things to help such as eliminating foreign competition to level the playing field for local producers said Lyle Stewart, Saskatchewan’s agriculture minister.

“There’s a limit to what we can do to keep land affordable. It’s a function of the market, supply and demand, and there’s quite a demand these days and, of course, a limited supply,” he said.

Starting in 2007 investment activity in farmland rose. Between 2007 and 2014 investors paid on average $882 per acre compared to $513 by buyers in family land transactions in 16 rural municipalities the report examined — on average, investors paid 72 per cent more.

Magnan and Desmarais found in some years, 10 to 25 per cent of farmland purchases in RMs were made by investors. In 2014 the largest investors in the province owned about 840,000 acres of farmland.

From the data Magnan and Desmarais compiled they determined Robert Andjelic from Alberta as the single biggest landowner in Saskatchewan with his company owning and managing 160,858 acres of land in 2014. Andjelic said he now owns more than 200,000 acres in the province.

Lately Andjelic said he has been getting out bid on land around 80 per cent of the time by local producers. When he makes bids on land he has to hold back from bidding too high based on the potential profit he can make renting the land out. A farmer working that piece of land makes a direct profit off that crop. An investor, though, would make only a portion of that based on a rental price.

In recent years commodity prices have been good which has pushed producers to decide to buy more land according to Todd Lewis, president of Agricultural Producers Association of Saskatchewan.

“Farming’s been successful the last few years and producers are taking the opportunity if parcels come up close to them that they’re interested in buying it,” he said.

However rising land values can be both a curse and a blessing according to Lewis.

“(Its) getting to be harder and harder for young producers (to buy land). It’s a barrier of entry for them … but at the same time for producers that are exiting the industry it’s a good thing,” he said.

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